Should a Derby Winning Horse Even Run the Preakness?
I know. You think that’s a stupid question. It's actually not though. Let me start you with two words: breeding rights. Kentucky Derby winner "Street Sense" has made almost $3 million in his eight career starts. His breeding rights are now worth about $40 million. Let me give you another word: insurance. I'm not privy to what the owner for Street Sense Jim Tafel is paying for insurance, but if he's insuring the horse’s full value he’s likely paying more for that than the winning purse of the Derby and the Preakness combined. Let me give you one more word: Barbaro.
With all that in mind, I think that we might come to a point where an owner whose horse won the Kentucky Derby could actually threaten to retire the horse to have him stand at stud or try to sell the horse before the Preakness. I know I would have done that had I purchased Teufelsberg for $9,000. Right before that horse ran in the Derby, his owners sold a 25 percent stake to media agent Jeff Singer. The horse finished fourth to last.
Anyway, I thought it would be interesting to consider the question of whether a Derby winner should run the Preakness. So I called Carl Nafzger, the trainer for "Street Sense" to talk to me about it.
Me: How much is this horse worth now?
Carl: Before the Derby, they were talking probably somewhere around $15 million, $20 million range, and right now he has doubled - at least doubled that -- after the Kentucky Derby.
Me: What’s the risk you take by running this race in relation to the horse’s value?
Carl: A lot of things come into play now. If you win the Preakness, you go on up in value, but if happen to lose the Preakness, then there’s a question if the Derby a fluke. You’re risking everything as you take a next step forward in the Triple Crown.
Me: So will we ever see a day where a Kentucky Derby winner will just call it quits after the race?
Carl: No, but I can see the day if you won the Triple Crown, that that day you may retire. But these, the owners like Mr. Tafel, they are people, they are sportsmen. They do want to go for the Triple Crown. It’s a goal in sports that anybody in horse racing wants to attain.
Me: Can you ever make up the insurance premiums by winning races?
Carl: The insurance premiums at full value would be very, very, very, really hard to attain in winning horse races.
Me: What does it do to the horse’s value if Street Sense wins the Preakness?
Carl: I think there would be an acceleration in value. I cannot foresee a great jump in value and acceleration, but basically it would more or less confirm the value that they have now, that he is truly a top horse, a horse in his own category.
Me: How does the horse’s value influence you as a trainer?
Carl: As a trainer, I cannot look at the investment standpoint. If the owner wishes to go, I have to prepare.
Me: How does Barbaro’s injury and subsequent death at all affect what you do out there?
Carl: It is always a consideration in what happened to Barbaro, but that’s like a running back worrying about his knee going out. You cannot consider that. It’s always in the back of your head all the time with these valuable animals with all horses, but you can’t stop it from doing your job.
Athletic Director for Peanuts
I was shocked when I saw the number: $25,008. That's how much Oregon's new athletic director Pat Kilkenny is getting paid to work. Fine. Kilkenny is apparently a guy that just cashed out of his insurance agency, but even if I had millions, there's no way I'd work for that -- especially with Phil Knight being the biggest booster at the place. This whole thing got me thinking that it's probably a good time to look at the salaries of athletic directors since you've all seen the college football and basketball coach salary stats a million times.
I first found out that in 1990, the average base salary for a Division I AD, according to a U.S. General Accounting Survey, was $80,047. That means if everything stayed the same, factoring in inflation, today's D-I athletic directors would be making about $125,000. But they're making at least double that. Just to get an idea of what some of these guys are making, I did a couple searches and came up with a less than perfect list, let's call it a sampling, of what the CEO of athletic departments are making.
Empty Seats
For the Final Four, I did a segment on the folks at World Access, an insurance agency that is in the unique business of selling ticket insurance. Well, they just dropped a very interesting survey on my desk. Check out this stat: One in 12 people reported that they missed an event that they had purchased tickets for in the past year because of unexpected circumstances, which has something to do with the fact that 33 percent of fans said they have purchased tickets for an event three or more months in advance.
The survey was obviously commissioned in the best interest of World Access, which sells ticket insurance for five percent of the cost of the ticket. First, I think the information here is relevant, but I also think this business is a real winner for the next couple years and there will be many players trying to get a piece of it.
Did I Really See What I Saw?
I went to Game 4 of the Nets-Cavs series at the Continental Airlines Arena on Monday to do a story on the Nets. As I was passing the Cavs bench during the game, I saw LeBron James during a time out, with what looked to be a gold-plated (it's hard to tell from a distance, but it wasn't the standard silver variety) nail clipper. He was sitting there just cleaning up his nails during a time out. Now I know he has a habit of biting his nails during games, but it just struck me as weird that he was giving himself a manicure during a timeout. I also want to know if that clipper is 24 karats.